Impairment charges relate to the market revaluation of land in Guangzhou (CHF 35 million), the production facilities in Walkersville subsequent to the transfer of the cell-therapy activities to Portsmouth and Houston (CHF 29 million) as well as other production assets in Nansha and Visp

CORE Results as Defined by Lonza

Lonza believes that disclosing CORE results of the Group’s performance enhances the financial markets’ understanding of the company because the CORE results enable better comparison across years. CORE results exclude exceptional expenses and income related to e.g. restructuring, environmental-remediation, acquisitions and divestitures, impairments and amortization of acquisition-related intangible assets, which can differ significantly from year to year. For this same reason, Lonza uses these CORE results in addition to IFRS as important factors in internally assessing the Group’s performance.

Reconciliation of IFRS Results to CORE Results 20171

million CHF

IFRS results

Impact from tax reform in US / Belgium

Results after US / Belgium tax reforms

Amortization of intangible assets from acquisitions

Impairments

Reversal of impairments

Restructuring costs / income

2Income / expense from acquisition and divestures

Environmental-related expenses

3Gain from Guangzhou (CN) land transaction

Other

CORE results

1

Restated to reflect adoption of IFRS 15 (see note 1) and classification of Water Care business as discontinued operations (see note 5.2).

2

Income / expense resulting from acquisition and divestitures.Result from operating activities (EBIT):– Capsugel: CHF 77 Million related to the fair value step-up of acquired Capsugel inventories as well as CHF 27 million for acquisition and integration-related costs– Peptides business: accumulated exchange rate translation reserve losses of CHF 35 million– Other acquisitions: acquisition and integration costs of CHF 2 millionNet financing costs:– Capsugel: Amortization of fees on bridge financing (see note 5) of CHF 37 million as well as option premium paid of CHF 19 million for derivative financial instrument to manage foreign currency exposure– InterHealth: Favorable impact from fair value adjustment on contingent purchase price consideration of CHF 7 million

3

See note to Operational Free Cash Flow.

4

Excluding the impact from tax reform in United States / Belgium, an average Group tax rate of 6.6% results, which is used for the calculation of income taxes on CORE reconciliation items.

Sales

4,548

0

4,548

0

0

0

0

0

0

0

0

4,548

Cost of goods sold

(2,893)

0

(2,893)

0

21

(2)

0

77

27

0

0

(2,770)

Gross profit

1,655

0

1,655

0

21

(2)

0

77

27

0

0

1,778

Marketing and distribution

(277)

0

(277)

0

0

0

0

0

0

0

0

(277)

Research and development

(95)

0

(95)

0

0

0

0

0

0

0

0

(95)

Administration and general overheads

(609)

0

(609)

100

0

0

7

29

0

0

0

(473)

Other operating income

109

0

109

0

0

0

0

0

0

(74)

0

35

Other operating expenses

(110)

0

(110)

0

0

0

6

35

5

0

0

(64)

Result from operating activities (EBIT)

673

0

673

100

21

(2)

13

141

32

(74)

0

904

Financial income

30

0

30

0

0

0

0

0

0

0

0

30

Financial expenses

(169)

0

(169)

0

0

0

0

49

0

0

1

(119)

Net financing costs

(139)

0

(139)

0

0

0

0

49

0

0

1

(89)

Share of profit / (loss) of associates/joint ventures

1

0

1

0

0

0

0

0

0

0

(1)

0

Profit before income taxes

535

0

535

100

21

(2)

13

190

32

(74)

0

815

Income taxes4

131

(187)

(56)

(7)

(1)

0

(1)

(13)

(2)

5

0

(75)

Profit from continuing operations

666

(187)

479

93

20

(2)

12

177

30

(69)

0

740

Loss on sale of discontinued operations, net of income taxes

43

0

43

4

0

0

0

0

0

0

0

47

Profit for the period

709

(187)

522

97

20

(2)

12

177

30

(69)

0

787

Non-controlling interests

(2)

0

(2)

0

0

0

0

0

0

0

0

(2)

Profit for the period, attributable to the equity holders of the parent

707

(187)

520

97

20

(2)

12

177

30

(69)

0

785

Number of shares basic

67,878,060

67,878,060

Number of shares diluted

68,460,234

68,460,234

Earnings per share for profit from continuing operations attributable to equity holders of the parent:

CHF

CHF

Basic earnings per share – EPS basic

9.78

10.87

Diluted earnings per share – EPS diluted

9.70

10.78

Earnings per share for profit attributable to equity holders of the parent: